2003-03-03 sec-litreleases litigation_release 66 KB 3,781 chars

SEC v. Paul J. Montle, No. LR-18015, Southern District of New York (Mar. 3, 2003) — Press Release

raw: Paul J. Montle, et al.

Paul J. Montle, et al., No. LR-18015 (S.D.N.Y. Mar. 3, 2003)

Caption: SEC v. Paul J. Montle

summary

Paul J. Montle was held in civil contempt for willfully refusing to pay a $415,092.25 SEC judgment for securities fraud—including false reporting, misleading filings, and stock manipulation—while hiding assets and maintaining an extravagant lifestyle, leading a judge to order monthly payments, asset turnover, and warn of jail for noncompliance.

paragraph

In 2001, Judge Milton Pollack entered a $415,092.25 judgment against Paul J. Montle for securities fraud, comprising $365,092.25 in disgorgement and interest and a $50,000 civil penalty, along with a five-year ban from serving as an officer or director and prohibition from participating in Regulation D/S offerings. Montle obstructed enforcement by refusing to disclose assets, filing a frivolous bankruptcy that was dismissed by the SEC, and continuing to live extravagantly while ignoring the judgment. On March 3, 2003, Judge Pollack found him in civil contempt, ordering monthly $10,000 payments, full asset disclosure, and surrender of assets, with a warning that further defiance could result in incarceration.

narrative

Paul J. Montle was the lead figure in a securities fraud scheme involving false and baseless sales reports for Viral Testing Systems Corporation, misleading filings regarding Lone Star Casino Corporation, and a market-manipulation scheme to artificially inflate the stock price of RMS Titanic, Inc. In 2001, after a bench trial, Judge Milton Pollack entered a judgment against Montle totaling $415,092.25, including $365,092.25 in disgorgement and pre-judgment interest and a $50,000 civil penalty, while also imposing a five-year bar from serving as an officer or director and prohibiting him from participating in Regulation D and S securities offerings. Montle refused to pay the judgment or provide asset information despite court orders, filed a bankruptcy petition in Texas to evade enforcement—which the SEC successfully had dismissed—and continued to maintain an extravagant lifestyle while concealing assets. The SEC pursued civil contempt sanctions, which Judge Pollack granted on March 3, 2003, finding Montle’s conduct 'contumacious' and 'obstructionist.' The court ordered Montle to pay $10,000 monthly, beginning March 13, 2003, to turn over all identified assets, and to fully disclose his financial holdings. Judge Pollack explicitly warned that any further disobedience would result in a motion for commitment to jail, reinforcing the court’s authority to enforce compliance through incarceration if necessary.

Enriched metadata

Scheme: obstruction (95%)
Court: Southern District of New York
Disgorgement: $365,092
Civil penalty: $50,000
Entity: Paul J. Montle

Classified obstruction(confidence 95%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →

Extracted insights

Dollar amounts 4

$415K $415,000 $100K–$1M
$365K $365,092 $100K–$1M
$50K $50,000 $10K–$100K
$10K $10,000 $10K–$100K

Entities 10

person bankruptcy protection
person contempt motion against montle
company false sales reports regarding viral testing systems corporation
agency false statements in sec filings regarding lone star casino corporation
person information concerning assets
person judge pollack
person judgment against montle
company market-manipulation scheme for rms titanic, inc.
person milton pollack
person paul j. montle

Triples 18

Milton Pollack Found Paul J. Montle in Contempt
Paul J. Montle Failed to Pay $415,000 Judgment
The Court Ordered Montle to Pay July 12, 2001 Judgment
The Commission Brought Civil Enforcement Action against Montle
Montle Published False Sales Reports regarding Viral Testing Systems Corporation
Montle Made False Statements in SEC Filings regarding Lone Star Casino Corporation
Montle Orchestrated Market-Manipulation Scheme for RMS Titanic, Inc.
Judge Pollack Entered Judgment against Montle
Judge Pollack Enjoined Montle from Violating Federal Securities Laws
Judge Pollack Ordered Montle to Pay $365,092.25 Disgorgement
Judge Pollack Ordered Montle to Pay $50,000 Civil Penalty
Judge Pollack Barred Montle from Acting as Officer or Director
Montle Refused to Produce Information Concerning Assets
The Commission Sought Civil Contempt Sanctions against Montle
Montle Filed for Bankruptcy Protection
The Commission Obtained Dismissal of Montle's Bankruptcy Proceeding
The Commission Renewed Contempt Motion against Montle
Judge Pollack Granted The Commission's Contempt Motion

View original SEC litigation releasesec.gov

Extracted body text (3,781c)

Securities and Exchange Commission v. Paul J. Montle, et al., 98 CV 3446 (S.D.N.Y.) (MP) (March 3, 2003) The Securities and Exchange Commission ("Commission") announced today that on March 3, 2003, the Honorable Milton Pollack, United States District Judge for the Southern District of New York, found defendant Paul J. Montle ("Montle") in contempt for failure to pay the Commission's $415,000 judgment ("Judgment") against him. The Court ordered Montle to pay the July 12, 2001 Judgment in monthly installments of $10,000 (beginning March 13) and to turn over assets to the Commission. In 1998, the Commission brought a civil enforcement action in the Southern District of New York against Montle as the lead figure in a series of federal securities law violations, which essentially included: (1) publishing, or causing to be published, numerous false and baseless sales reports and projections regarding Viral Testing Systems Corporation; (2) making false statements in Commission filings regarding Lone Star Casino Corporation; and (3) orchestrating a market-manipulation scheme designed to maintain and raise artificially the stock price of RMS Titanic, Inc. On July 12, 2001, after a bench trial, Judge Pollack entered a judgment against Montle (the AJudgment@) on all counts alleged in the Commission's complaint. Judge Pollack: (1) permanently enjoined Montle from violating various sections of the federal securities laws, including, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder; (2) ordered Montle to pay the Commission disgorgement plus pre-judgment interest thereon, totaling $365,092.25; (3) ordered Montle to pay a $50,000 civil penalty; (4) barred Montle for the period of five years from acting as an officer or director of a public company; and (5) prohibited Montle from participating, directly or indirectly, in the sale of securities pursuant to Regulations D and S of the Securities Act of 1933. Montle failed to pay the Judgment, and the Commission subsequently sought information from him concerning his assets. However, Montle refused to produce this information, and on January 17, 2002, Judge Pollack ordered Montle to do so. On January 30, 2002, after Montle still refused to provide the requested information (and to pay the Judgment), the Commission sought civil contempt sanctions against him. In a final attempt to avoid payment, Montle filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. In April 2002, the Commission obtained a dismissal of Montle's bankruptcy proceeding, and the Commission renewed its request for contempt sanctions before Judge Pollack. Judge Pollack initially held that request in abeyance pending further investigation of Montle's assets. On January 8, 2003, the Commission renewed its contempt motion against Montle in light of evidence that Montle had been hiding assets from the Commission. On March 3, 2003, Judge Pollack granted the Commission's contempt motion and ordered Montle to pay the Commission in monthly installments of $10,000, with the first payment due March 13, 2003. Additionally, Judge Pollack ordered Montle to produce information to the Commission regarding his assets and to turn over certain assets. The order also allows the Commission to move the Court for an order of commitment if Montle "disobeys this Order in any respect." Judge Pollack found that Montle had engaged in "obstructionism" by failing to produce key documents to the Commission. Judge Pollack further noted that Montle's "continuing refusal to pay a penny of the Judgment, at the same time that he maintained an admittedly extravagant lifestyle and hid assets, strikes this Court as contumacious conduct."

OCR text (3,781c · plain-text · 99% conf)